Gold price down on corrective pullback from recent gains

(Kitco News, Wed. Aug. 25thth, 2021) – Gold and silver prices are trading lower in early dealings Wednesday, on routine downside corrections after recent gains. Keener risk recently is a bearish element for the safe-haven metals. October gold futures were last down $13.40 at $1,792.90. September Comex silver was last down $0.144 at $23.75 an ounce.

Global stock markets were mixed to weaker overnight. The U.S. stock indexes are pointed to slightly higher openings and at or near record highs when the New York day session begins. Risk appetite is more robust this week as attention of the marketplace is on the annual Federal Reserve symposium held in Jackson Hole, Wyoming late this week. Fed Chair Jerome Powell is slated to speak virtually on Friday. Many traders and investors are thinking the Federal Reserve will decide to extend its easy-money policies for a longer period of time than they had reckoned just a few weeks ago, due to the rapidly spreading Covid delta variant. The marketplace that remains flush with cash continues to see much of that cash flowing into stock markets. The aforementioned scenario is also friendly for the metals markets, as it also suggests better demand for them.

U.S. congressional Democrats on Tuesday agreed upon a $1 trillion spending bill for infrastructure, and that is also boosting risk appetite at mid-week.

Meantime, Asian stock markets were mostly weaker Wednesday on fears the surging coronavirus variant will once again dent economic growth in Asia.

In Europe, the closely watched German Ifo business expectations index fell in August for the second month in a row.

The key outside markets today see the U.S. dollar index firmer and still trending higher. Nymex crude oil futures prices are higher and trading around $67.50 a barrel. This week’s strong rebound in crude prices suggests the market has put in a near-term bottom. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.30%.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, durable goods orders and the weekly DOE liquid energy stocks report.

Technically, October gold futures bulls have the overall near-term technical advantage. Prices are in an uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the July high of $1,836.20. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,750.00. First resistance is seen at $1,800.00 and then at this week’s high of $1,809.80. First support is seen at this week’s low of $1,775.90 and then at $1,770.00.

The silver bears have the overall near-term technical advantage. Prices are still in a three-month-old downtrend on the daily bar chart. Silver bulls’ next upside price objective is closing September futures prices above solid technical resistance at $25.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the August low of $22.295. First resistance is seen at $24.00 and then at $24.38. Next support is seen at Tuesday’s low of $23.545 and then at $23.25

Posted by :

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com